In a second-price auction for sports inventory within Display & Video 360, if you’re the highest bidder at $5.00 and the second-highest bid is $4.00, you will pay $4.01 for these impressions.
- $5.01
- $4.00
- $5.00
- $4.01
The correct answer is: $4.01
Explanation: A second-price auction is designed so that the winning bidder pays just one cent more than the bid of the second-highest bidder. This approach encourages bidders to bid their true maximum value for the impression, knowing that if they win, they only need to pay slightly above the next highest bid, in this case, $4.01, ensuring a fair price is paid based on the competitive bidding landscape.
Chapter 21: Understand Auction Dynamics